Counterdrone Systems Supplier Gets Biggest Ever Order

DroneShield Ltd. (DRO:ASX; DRSHF:OTC) received a set of three standalone follow-on contracts for AU$61.6 million ($61.6M), or US$40M, worth of counterdrone system (C-UAS) products, the largest order in the company's history, more than all of its 2024 revenue of AU$57.5M, according to a news release.

"Our expanded team in Europe, combined with growing manufacturing output in Australia, ensures DroneShield is well positioned to meet the rising demand from both existing and new defense partners," the company's chief executive officer Oleg Vornik said in the release.

The Australia-based firm provides C-UAS solutions to customers globally, with a focus on radiofrequency sensing, artificial intelligence and machine learning, sensor fusion, electronic warfare, rapid prototyping and MIL-SPEC manufacturing.

The new contracts, for handheld detection and counterdrone systems and related accessories, are with a privately owned, in-country European reseller that is contractually required to distribute the products to a European military customer.

DroneShield should be able to deliver, throughout Q3/25, all equipment ordered due to its recent production and inventory expansion. Cash payments are expected in Q3/25 and Q4/25.

This major contract aligns with DroneShield's broader expansion throughout Europe, one of its largest geographical segments, with a pipeline of 55 active opportunities valued in aggregate at AU$1.1 billion (AU$1.1B). Last year, the company exported 91% of its Australian production.

DroneShield is significantly investing to expand its operations in the region, supporting domestic defense programs such as the €800B (AU$1.4 trillion) ReArm Europe Plan, now called Readiness 2030. This program is to boost European Union (EU) defense spending through fiscal flexibility and loans, reinforce industrial and procurement autonomy throughout the EU and mobilize private investment and support for Ukraine. DroneShield continues to support Ukrainian frontline operations with rapid upgrades to counter evolving drone threats, a process enhanced through its Sydney-based development and collaboration hub.

As such, DroneShield is establishing a European Center of Excellence focused on manufacturing and assembly, research and development (R&D), drone testing, and training. This will be the company's first European manufacturing and in-house assembly facility outside of Australia, a second production line for the company's main hardware with at least 65% European industry content for specific regional sales.

"Establishing a robust European supply chain to support equipment sold in the region will strengthen sovereign capability," Vornik wrote. "Meanwhile, our experienced Australian software development team continues to deliver critical updates addressing emerging threats, both in Ukraine and globally."

The new manufacturing capabilities are expected to qualify the company for further procurement programs, increasing both scale and frequency of Europe-based orders.

In Australia, the government is increasing defense spending, forecasted to double to AU$100B by fiscal year 2034, under the Future Made in Australia initiative to develop a more capable and self-reliant defense force. DroneShield intends to continue delivering cutting-edge sovereign defense capabilities to support the interests of Australia and its allies.

Wholly Focused on C-UAS Sector

DroneShield offers artificial intelligence-powered hardware and software solutions designed to detect, track, and defeat unmanned threats from drones used by terrorists, state actors, criminals, and other nefarious groups, according to its website. The company has nine hardware products in its portfolio, two of which it introduced in Q1/25, notes DroneShield's June 2025 Investor Presentation.

Its technology is safe and not destructive, posing no harm to drones or humans. DroneShield is the only publicly listed company exclusively focused on the fast-growing C-UAS sector. As it continues growing, DroneShield is ideally positioned to drive innovation and deliver lasting value. It boasts 217 engineers on its team and an annual R&D spend of AU$50M-plus.

Because the number of applications for DroneShield's C-UAS technology is on the rise, there is a significant opportunity to expand into multiple end markets. These include government facilities, energy production and critical Infrastructure, airports, military, correctional facilities, law enforcement, and other (stadiums, events, oil refineries, shipping and ports, etc.).

DroneShield has an extensive and growing pipeline on which it continues to execute. It consists of 256 projects and as of May, is worth AU$2.35B, reflecting a 351% year-over-year (YOY) increase.

The company's financial performance is strong. Q1/25, the most recent period reported, was its highest revenue quarter, at AU$33.5M, up 102% YOY. Its revenue from software-as-a-service (SaaS) was AU$1.7M, a 198% increase over Q1/24. Year to date secured revenue is AU$100.4M. DroneShield had CA$213.4M in cash as of May 20, affording the company financial flexibility and allowing for its ongoing investment.

26.5% CAGR Forecasted to 2030

The global anti-drone market will reach US$14.51B by 2030 from US$4.48B in 2025, reflecting a compound annual growth rate of 26.5%, according to Market and Markets' latest report, noted Security World Market in a June 25 article.

The primary market growth driver is escalating security concerns about "unauthorized and potentially malicious use of drones" in military, critical infrastructure, and public spaces, the article noted. Advances in detection and mitigation technologies, such as AI-powered systems, multi-sensor integration, and directed energy weapons, in large part fuel the market by improving the effectiveness and reliability of C-UAS solutions.

Counterdrones' ground-based segment is projected to hold the biggest share of the antidrone market in 2030 due to the equipment's versatility, ease of deployment, and ability to cover vast areas with integrated sensor arrays. 

One trend bolstering the market is that governments around the world are increasing their defense budgets. Earlier this week, at the North Atlantic Treaty Organization's (NATO's) annual conference, NATO leaders agreed to increase defense spending to 5% from 2% of their country's economic output by 2035, after months of pressure from U.S. President Donald Trump, reported The Washington Post on June 25.

Counterdrone technology is a key focus of military budgets. In the U.S., a proposal introduced by Republicans in the House of Representatives would earmark US$1.3B for counterdrone technology as part of the US$150B increase in defense spending, reported C-UASHub in April.

The Catalysts

In its Investor Presentation, DroneShield listed its strategic priorities for 2025 and 2026, any of which could catalyze its share price.

One is to launch next-generation hardware for all of its product families.

Another is to grow SaaS revenue through both new products as well as additional Saas options on existing products.

A third is to expand wallet share by embedding more solutions for customers.

The last is to start selling its products to civilians.

Key Pick in Defense Sector

Bell Potter Analyst Daniel Laing outlined, in an April research report, his investment thesis for DroneShield. One component is strong market demand, which the company is poised to meet, having scaled up its operations and invested heavily in building its inventory. Structural growth in the market is a second element. Geopolitical conflicts are causing countries to increase their defense budgets significantly. Drones and antidrone defense is one of the fastest growing subsets of the growing military market, DroneShield's area of expertise. The third component is the opportunity for expansion into adjacent markets.

"DroneShield remains our Key Pick in the defense sector, with macro tailwinds driving increasing customer demand, and the company is well capitalized to fund further R&D to maintain its market-leading position," the analyst added. "We retain our Buy recommendation."

Ownership and Share Structure

According to Refinitiv, 13 strategic entities own 10.26% of DroneShield. The Top 3 shareholders are Epirus Inc. with 2.12%, Beta Gamma Pty. Ltd. with 2.07% and Paul Jonathan Shaw with 1.45%.

As for institutional ownership, 20 entities hold 22.17%. The Top 3 are Regal Funds Management Pty. Ltd. with 9.37%, The Vanguard Group Inc. with 5.45% and State Street Global Advisors Australia Ltd. with 4.12%.

The rest is in retail.

DroneShield has 874.54 million (874.54M) outstanding shares and 784.82M free float traded shares. Its market cap is AU$1.21B. Its 52-week range is AU$0.585–2.72 per share.